Clarified Risk Assessment Standards

As you are aware the Auditing Standards Board (ASB) is involved in a Clarity Project. Over the past few months existing Statements on Auditing Standards (SASs) have been redrafted to comply with clarity drafting conventions.

The ASB has issued six “clarified statements” related to risk assessment. You will recall that the ASB previously issued SAS Nos. 104-111 (the risk assessment standards) effective for audits of financial statements for periods beginning on or after December 15, 2006. The clarified Risk Assessment Standards are the redrafting of SAS Nos. 106-110.

The six clarified statements also converge with International Standards on Auditing (ISA). The statements are:

• Planning an Audit
• Materiality in Planning and Performing an Audit
• Evaluation of Misstatements Identified During the Audit
• Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (Redrafted)
• Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained (Redrafted)
• Audit Evidence (Redrafted)
  

The SASs are effective for audits of financial statements for periods beginning on or after Dec. 15, 2010. The effective date is provisional but will not be earlier.

When all the clarified SASs are issued, one SAS will be issued containing all clarified SASs in codified format.

The SASs are available for download on the AICPA’s web site, http://www.aicpa.org/.

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